• Amber Thomas

House Passes Phase 4 COVID-19 Relief. The Senate Says It’s Dead on Arrival.

On Friday, the House of Representatives approved the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The act is an ambitious, $3 trillion spending bill covering students, frontline workers, businesses, nonprofits, governments, and families. Unlike the previous bipartisan COVID-19 relief bills, this legislation was drafted primarily by House Democratic leaders without input from rank-and-file House Democrats, congressional Republicans, or the White House. Given those circumstances, it has zero chance of passage in its current form in the Republican-controlled Senate. However, parts of the bill could be included in the next Senate relief legislation.

Highlights of the bill include:

  • Changes to the SBA’s Paycheck Protection Program (PPP), including: setting aside funds specifically for small Community Development Financial Institutions (CDFIs), Minority Development Institutions (MDIs), SBA microlenders, and SBA Certified Development Companies (CDCs); requiring that 25% of the funds be used for small businesses with 10 or fewer employees and that another 25% of the funds be used solely for nonprofits; and expanding PPP eligibility to include all nonprofits.

  • An additional $10 billion for emergency Economic Injury Disaster Loan (EIDL) grants to remain available until expended.

  • $915 billion in aid to state and local governments facing budget pressures as tax revenues fall.

  • Another round of $1200 direct tax rebates to taxpayers with more generous conditions than the previous payments.

  • Extension of the $600-per-week federal supplement to unemployment benefits through January 2021.

  • $180 billion to increase pay for essential workers who have continued working during the pandemic.

  • $75 billion in additional funding for testing and contact tracing of those exposed.

  • Automatic forbearance on delinquent home mortgages, a moratorium on evictions, and $175 billion in relief for rent, mortgage, and utility costs to consumers.

  • Extension of student loan forbearance to all federal and private loans through September 2021 and forgiveness of up to $10,000 in student debt. 

  • $90 billion in state grants to be used for early childhood, elementary, secondary, and post-secondary education systems; a third of the funds must go to higher education institutions.

Most experts say it is highly unlikely that Congress will pass another relief package until after the Memorial Day recess. Senate GOP leaders indicated they’re not in a hurry to adopt a new spending package until it assesses the effectiveness of the earlier relief packages. Yet demand for a Phase 4 stimulus package is intensifying as another nearly 3 million Americans filed for unemployment compensation in the week ending May 9, bringing the total to 36 million who have filed claims in the past two months. Most recently, Federal Reserve Board Chairman Jerome Powell weighed in with a warning of a protracted, painful downturn if a Phase 4 stimulus is not enacted soon.


For more in-depth details on the HEROES Act, here’s a copy of the 1,800+ page bill and a 90-page summary from the House Appropriations Committee.

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